Indian Journal of Multidisciplinary Research and Studies

Agricultural Credit Utilization and Its Impact on Farm Productivity and Farm Income: Evidence from Small and Marginal Farmers in Darrang District of Assam

Agricultural credit plays a crucial role in enhancing agricultural productivity, promoting technological adoption, and improving the economic well-being of farming households. The present study examines the extent and pattern of agricultural credit utilization among small and marginal farmers in Darrang district of Assam and analyses its impact on farm productivity and farm income. The study is based on primary data collected from 300 small and marginal farmers through a structured questionnaire. Descriptive statistical techniques were employed to analyse the utilization pattern of agricultural credit, while Ordinary Least Squares (OLS) regression models were used to estimate the impact of credit utilization on farm productivity and farm income. The findings reveal that agricultural credit has become an important source of production finance among farming households, with commercial banks and Kisan Credit Card (KCC) facilities emerging as the major sources of institutional credit. The majority of borrowers utilized credit for productive agricultural purposes, particularly for the purchase of seeds, fertilizers, labour, and farm equipment. The comparative analysis indicates that farmers utilizing agricultural credit achieved higher levels of productivity and farm income than non-credit users. The regression results further demonstrate that agricultural credit exerts a positive and statistically significant influence on both farm productivity and annual farm income. Education, farming experience, and operational landholding were also found to positively affect agricultural performance. The study concludes that agricultural credit serves as an important catalyst for agricultural development among small and marginal farmers. Strengthening institutional credit delivery systems, expanding KCC coverage, improving financial literacy, and integrating credit support with extension services can significantly enhance agricultural productivity and rural livelihoods. The findings provide important policy insights for promoting inclusive agricultural growth and strengthening rural financial systems in Assam.